Question

when is Aggregate demand curve parallel to the consumption curve.​

Answer 1

Answer:

AD is total aggregate of Consumption and Investment. Where Investment is constant and parallel to x-axis and consumption curve is upward sloping but AD which includes both investment and consumption is parallel to consumption curve and above it.

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Answer 2

Answer:

Whereas investment is constant and parallel to the x-axis, and consumption is upward sloping, AD, which comprises both investment and consumption, is parallel to and above the consumption curve.

Explanation:

• The whole aggregate of consumption and investment is known as AD.
• The desired amount of expenditure in the economy throughout an accounting year is referred to as aggregate demand.
• It is the amount of money that people want to spend on products and services during a certain accounting year.
• Because of increased income in the economy, the AD curve is upward sloping. As income rises, so does people's spending, resulting in rising AD.
• The link between the total quantity of production demanded (measured in real GDP) and the price level is depicted by an aggregate demand curve (AD) (measured as the implicit price deflator).

Hence, AD, which includes both investment and consumption, is parallel to and above the consumption curve, whereas investment is constant and parallel to the x-axis and consumption is upward sloping.

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